~ Nt Narayana Health T~ Date of submission: 8 th August 2018 To To The Seereta ry The Secretary Listing Department Listing Department BSE Limited National Stock Exchange of India Limited Department of Corporate Services Exchange Plaza, Sandra Kurla Complex Phiroze Jeejeebhoy Towers, Mumbai - 400 050 Dalal Street, Mumbai - 400 001 Scrip Code- NH Scrip Code - 539551 Dear Sir/Madam, Sub: Annual Report for the FY 2017-18 Ref: Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 Please find enclosed the Annual Report for the financial year 2017-18 as required under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 duly approved and adopted by the Members at the 18th Annual General Meeting held on 3rd August 2018. We request you to kindly take this on your record and oblige. Thanking You, Narayana Hrudayalaya Limited P,~aQUSl'1 N 1rayana Hrud~ ,, 1 l CIN S: I 1KA2000 .J27 '9 Registered Office 258/A, Bommasanora Industrial Area. Ane1<al TaluK, Bangalo,e 560099 Corporate Office 261/A, 2nd Floor. Bommasanrim lndustnn: Area. Anekal Taluk, Bangalore 560099 Tel +91 807122 2222 Fax .. g I 80 2783 2648 www narayan.1hea.th.o•g QUALITY HEALTHCARE EXPANDING REACH ANNUAL NARAYANA HRUDAYALAYA LIMITED 2017-18 REPORT CONTENTS 01-38 Company Overview 01 NH’s Footprint in India 02 Operational and Clinical Highlights 04 Chairman’s Message 06 CEO’s Message 08 HCCI-Cayman Islands 10 Clinical Review of Services 18 Clinical Excellence through continuous improvement and 39-100 101-236 monitoring Statutory Reports Financial Statements 20 Patient Safety 39 Board’s Report 101 Standalone Financial 22 SMAC Social Mobile Analytics Statements and Cloud 60 CSR Report 166 Consolidated Financial 25 Reaching New Milestone 67 Corporate Governance Report Statements in Services 83 Business Responsibility 26 Board of Directors Report 30 Management Discussion and Analysis You can find this report and additional information, log on to www.narayanahealth.org NH’s FOOTPRINT IN INDIA As on 1st May 2018 Kakriyal, Jammu Northern Region Western Region 3 Hospitals 5 Hospitals Operational Beds: 543 Operational Beds: 940 Delhi NCR Jaipur Guwahati Palanpur Durgapur Jamshedpur Ahmedabad Kolkata Raipur Mumbai Eastern Region Karnataka Region Bellary 7 Hospitals, 6 Heart Centres 9 Hospitals, 1 Heart Centre Hospital Operational Beds: Hospital Operational Beds: 2,220 Shimoga Bengaluru 2,042 Heart Centres Operational Beds: Heart Centre Operational Beds: 322 Mysuru 49 Bengaluru has 4 hospitals Kolkata has 6 hospitals (3 are acquired) Map not to Scale. Annual Report 2017-18 1 COMPANY OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS OPERATIONAL AND CLINICAL HIGHLIGHTS 2 Narayana Hrudayalaya Limited NH commissioned 207 capacity Successfully consummated the A rare case of a 5-year-old boy bedded SRCC Narayana Hospital acquisition of the partner’s entire with fulminant hepatic failure was at Haji Ali, Mumbai which is a stake in Cayman Islands Hospital, treated with an emergency liver premier one-of-its kind paediatric making it a wholly owned subsidiary transplant procedure at Mazumdar facility in April 2017 of NH and thereby creating value for Shaw Medical Centre, Bengaluru all our stakeholders MSMC, Bengaluru treated a rare NH commissioned its state-of-the Extending advanced clinical cancer called Alveolar Soft Part art 211 capacity bedded Narayana programs beyond the metros, Sarcoma of Pelvic Bone. The Superspeciality Hospital, Gurugram, a minimal invasive surgery like affected part of the pelvic bone a world class medical facility TAVI was performed at Narayana was removed and replanted after catering to the healthcare needs of Multispeciality Hospital, Mysore, sterilising it via radiation through a the NCR region in March 2018 first of its kind in the city technique called Extra Corporeal Radiotherapy Our hospital in Howrah successfully performed a complicated procedure involving Intra-Cardiac Repair for Tetralogy of Fallot along with a complete chest wall reconstruction on a 2-year-old girl Annual Report 2017-18 3 COMPANY OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS CHAIRMAN’s MEssagE National Health Protection Scheme – Inching towards the Dream of Ayushman Bharat The Union Budget presented in Febuary 2018 saw the unveiling of a mega healthcare project, The National Health Protection Scheme (NHPS) is aimed at extending healthcare insurance to 100 mn families and raising the insurance ceiling to ` 5 lakhs per family. The scheme will target up to 500 million individuals from financially vulnerable households, a demographic that accounts for 41.3% of the population. The scheme of this scale will be a game changer for the Indian healthcare industry. In Rural India, 150,000 basic healthcare facilities exist only on paper and offer only maternal and child healthcare services. By providing free access to secondary and tertiary healthcare services to millions of people, it will open up avenues of growth for healthcare operators like NH which emphasises on universal healthcare coverage. We, at NH, are quite excited about this revolutionary scheme and are inclined towards working in tandem with the government agencies to progress towards this goal of universal healthcare for all. Closing the Looming Healthcare Talent Gap – Carving Opportunities out of Problems In the World Health Organisation’s ranking of health systems of countries, India is ranked at 112, way below countries like TO THE ESTEEMED SHAREHOLDERS, Bangladesh, Indonesia, Iran and Iraq. This abysmal rank Providing affordable, quality healthcare to speaks volume about India’s fragile medical infrastructure masses formed the bedrock of Narayana and shortage of clinical talent. A recent survey by Boston Hrudayalaya back in 2000 and we are Consulting Group and Confederation of Indian Industry states proud to have carried this baton all these that Indian healthcare sector will generate 40 mn new jobs by 18 years. We are progressing towards our 2020. There is a huge opportunity in the healthcare sector as aim of Healthy India with our continued the World Bank predicts a shortage of 80 mn workers by 2030 endeavours driven by twin engines of globally and India will need 2 mn doctors and 6 mn nurses frugal innovation and clinical excellence by that time. There is a dire need to create an ecosystem and fiscal year 2018 was no exception. It of skill sets built on a knowledge-based society. Private turned out to be a historic year for us as hospital operators have to work in tandem with government we projected ourselves on Pan-India stage bodies to create a learning environment. Indian healthcare with our maiden entry in Delhi NCR and sector could turn out to be one of the largest employers and Mumbai markets. Our focus on opening give an impetus to the economy. NH is working with various the doors of healthcare to a broader set developmental agencies and other institutions, such as the of population helped us serve ~2.6 mn National Skills Development Council, and College of Physicians patients in FY18. Our ethos with patients’ and Surgeons to address this critical skills shortage. Our well-being at the epicentre have led to vision is to convert all our hospitals into training institutions your company revolutionising every touch that will train the healthcare workforce for the 21st century. NH point of the patient care cycle. is also investing in hospital management courses to prepare succession plans across all levels of the organisation. 4 Narayana Hrudayalaya Limited % mn ~60 ~2.6 of deaths occur due to patients treated at Non-Communicable NH in 2018 Diseases in India Stepping up the Fight against the investing more and more of my time on creating software for Non-Communicable Diseases doctors that will revolutionise their practice. Today, Non-Communicable Diseases (NCD) are responsible for over 60% of deaths in India with cardio vascular disease Caring for the Uncared being responsible for ~20% deaths and cancer not far behind Since its inception, NH has taken various social responsibilities, at ~10% deaths. As per experts, cancer cases will increase informed by our experience and in alignment with our vision significantly in the coming years. By 2020, around 1.7 mn towards equitable, accessible and affordable healthcare for all. people are expected to have cancer and deaths due to cancer NH has sought to leverage on CSR towards realising broader will increase up to 20%. system level goals and expand into different domains like healthcare, education and environment. Some of the initiatives To empower NH with all kinds of medical technology and are listed below: clinical talent to fight the rapid rise of cancer, we devised a strategy to create regional Centre of Excellence (COE) across E - Health Centre Program all our clusters which started off by creating state-of-the NH is the healthcare partner in this program to operate & art oncology blocks in our flagship Health City Campus at manage the eHealth Centre’s (eHC). eHCs are fully equipped Bengaluru and our unit at Mysore, followed by acquisition of with workstations, open electronic medical records (EMR) Westbank Hospital at Kolkata to strengthen the oncology play systems, biometric patient identification and integrated in East and subsequently forging partnership to run renowned diagnostic devices. 10 centres have now been established Dharamshila Cancer Care unit in Delhi so as to equip the across India. Since the program’s inception in December 2014, northern cluster with oncology expertise. In the Western cluster, we have provided tele-consultations to ~45,000 patients and we are in the process of commissioning a radiation oncology screened ~12,000 patients. block in Raipur unit. We believe that oncology would be the next driver of growth in the Indian healthcare context and with Mobile Mammography Screening these COEs, we, at NH, would be able to provide world-class It aims to create awareness among the people about breast expertise and medical opinion on oncology cases.